Concerns over economy weigh on Wall Street

Stocks dropped Friday as concerns about slowing economic growth persisted, causing investors to sell shares of many industrial and transportation companies and leaving all three major market indexes in the red for the week.

The Standard & Poor’s 500 and the Nasdaq composite had their biggest weekly drops since July, although thin trading exaggerated stocks’ moves. Trading was light ahead of the three-day Christmas weekend.

The government reported that durable goods orders rose in November, but some traders focused on a decline in orders excluding transportation goods.

It was the second consecutive monthly drop in durables orders excluding transportation goods, and the fourth decline in the last five months.

“One of the most important variables next year is [business] capital spending, and this gives you some insight into capital spending intentions. Frankly, I think it’s going to be disappointing,” said Michael Metz, chief investment strategist at Oppenheimer & Co. in New York.

The Dow Jones industrial average fell 78.03 points, or 0.6%, to end at 12,343.22. The blue-chip Dow hit a record closing high of 12,471.32 on Tuesday.

The S&P; 500 was down 7.54 points, or 0.5%, at 1,410.76. The Nasdaq index lost 14.67 points, or 0.6%, to 2,401.18.

For the week, the Dow fell 0.8%, the S&P; 500 lost 1.1% and the Nasdaq declined 2.3%.

The durable goods data followed a report Thursday that showed the U.S. economy in the third quarter grew at a slower rate than earlier estimated.

Recent weakness in prices of commodities such as copper, which are seen as indicators of economic health, has added to negative sentiment on the growth outlook.

Consumers, however, still appear happy to spend, buoying the economy, analysts said.

The Commerce Department said consumer spending rose 0.5% last month. That was up from a 0.3% gain in the previous month and was the strongest showing since July.

In the Treasury bond market Friday yields rose sharply, but traders said the move was largely a technical reversal of a decline in yields on Thursday. The 10-year T-note ended at 4.62%, up from 4.55% on Thursday and the highest since mid-November.

Oil prices fell in light pre-holiday trading but held above $62 a barrel as brokers weighed slower economic growth and expectations of a mild winter against the Organization of the Petroleum Exporting Countries’ determination to tighten supplies.

Near-term crude oil futures declined 25 cents to settle at $62.41 a barrel in a shortened trading session in New York. On Thursday crude fell $1.06.

Among the day’s market highlights:

* Industrial stocks losing ground included Boeing, off $1.18 to $88.76; DuPont, down 41 cents to $48.57; Deere, off $1.69 to $94.21; and Kaiser Aluminum, down $1.31 to $55.71.

* The 20-stock Dow transportation index slid 33.14 points, or 0.7%, to 4,510.50, its eighth decline in nine sessions. The index, often considered a harbinger of shifts in the economy, is at its lowest point since early October.

FedEx dropped $1.07 to $107.47, Norfolk Southern fell 79 cents to $48.93 and C.H. Robinson, a logistics-services provider, slumped $1.26 to $39.44.

* Microsoft, often viewed as a bellwether of technology capital spending, was the biggest drag on the S&P; 500 and one of the biggest drags on the Nasdaq. Microsoft declined 1.1%, or 34 cents, to $29.64.

* Qualcomm dropped 73 cents, or 1.9%, to $37.81 after the designer of microchips for mobile telephones lowered its fiscal first-quarter profit forecast, citing higher legal costs and a deferred payment from a customer. JP Morgan analysts cut their rating on the stock to “underweight.”

* Some retailers gained ahead of the final holiday shopping weekend. J.C. Penney, the third-largest U.S. department-store company, climbed $1.21 to $79.57. Nordstrom jumped 62 cents to $48.85.